“What is really amazing about it is the speed of the deterioration since the election,” says Geoffrey Dennis, the head of global emerging-market strategy at UBS Securities.”
“All the sources of growth in Brazil have disappeared.”
Brazil’s domestic turmoil couldn’t come at a worse time.
Emerging markets around the world are declining on speculation that slowing growth in China will damage the global economy and that an increase in U.S. interest rates will lure capital away from developing nations. Still, Brazil’s decline has been more pronounced.
Charts courtesy of Bloomberg – click to hyper-inflate
It doesn’t really get any better – interest rates increased due to the Dutch Disease – currency in free fall and no hope on the horizon – combined with corruption within Government.
China is not the savior this time around – Petrobas will put their hand up and seek the Government’s favor in sorting out their USD95 billion debt situation- no they cannot meet the interest payments on current income – yes the Brazilian government did guarantee the debt raising.